The incentive landscape.

Texas competes for data centers with a layered incentive landscape: state sales-tax exemption programs for qualifying facilities, negotiated local property-tax agreements, and a school-district value-limitation framework for the largest capital projects. None of it is automatic. Each layer has its own qualification tests, its own counterparties, and its own paperwork — and all of it requires advisors who work these programs for a living.

The state layer: sales-tax exemptions

Texas offers sales-tax exemption programs for qualifying data centers, covering categories of equipment a large facility buys in volume — servers, cooling, electrical infrastructure. Qualification typically turns on committed capital investment and job creation above program thresholds, sustained over a defined period, and certification and reporting obligations continue for the life of the benefit — the exemption is earned annually, not granted once. For a facility that spends heavily on equipment year after year, it compounds into one of the larger line items in the incentive stack. The thresholds and covered categories are set by statute and change; verify current terms before modeling them.

The local layer: property-tax agreements

Property tax is the big recurring tax cost for a capital-intensive facility, and it is levied locally — counties, cities, school districts, special districts. Developers negotiate agreements with these taxing units directly, trading committed investment and jobs for abatements or structured payments over a term. Every agreement is bespoke, and the outcome depends on the project's leverage and the jurisdiction's appetite. Enter those conversations with a defined ask and a real project; taxing units have seen enough speculative land plays to know the difference.

The JETI framework

For the largest projects, Texas operates the Jobs, Energy, Technology and Innovation framework — JETI — which offers school-district property-tax value limitations to major capital investments that clear eligibility tests. It is the successor to the state's prior abatement regime, rebuilt with its own eligibility rules and process, and its rules are new enough that current advice matters more than precedent. For projects at data-center scale, it can address the single largest slice of the property-tax bill. It is an application-driven program with real scrutiny, not an entitlement.

What qualifies, and who to bring

Across all three layers the pattern repeats: capital investment above a threshold, jobs above a threshold, commitments sustained over time. Power infrastructure has its own wrinkles — how generation assets are treated differs from how the data hall is treated. This page describes the shape of the landscape, not its current rules: engage tax counsel and incentive advisors early, before land is committed, because the strongest negotiating position a project ever has is before it has chosen a site. Incentives are one line in a larger siting equation — see the cost math and current capacity for how power fits in.

About Corley Energy

Corley Energy is a behind-the-meter independent power producer, founded in 2024 by Jake Corley, Tim Bozeman, and Mark Meyer. We convert stranded Permian Basin natural gas into firm, contracted electricity for AI data centers at Power Foundry, our ~1,000-acre development in Upton County, Texas. Start with what a power foundry is, see the company facts, or check current capacity on the Sites page.

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TCEQ air permits for gas generation: how the process works · The JETI Act and Texas power generation · Power purchase agreements for behind-the-meter generation · Browse the full library